Medical Research Fund a Hollowmen moment?

Health department officials only began work on the $20 billion Medical Research Future Fund in April, just weeks before it was announced in the budget.

Labor seized on the evidence, given to a Senate hearing on Monday, to claim the fund was set up to distract voters from the $7 fee for GP visits and cuts to hospitals.

"The policy development process reads more like a script for The Hollowmen than the way an 'adult government' conducts itself," Labor's health spokeswoman Catherine King said.

Lachy Hulme and Merrick Watts cook up policies in politics satire The Hollowmen.

In the satirical TV series, political staffers concerned about the lack of a budget centrepiece decide at the last minute to create a $150 billion National Perpetual Endowment Fund to meet the nation's future challenges.

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"The best part of it is, we'll never have to specify how it will all work," the character of central policy unit director David "Murph" Murphy, played by Lachy Hulme, says in the Rear Vision episode.

The similarity between the Coalition policy and The Hollowmen episode is not lost on Rob Sitch, one of the creators and stars of the show.

"When the budget came out, it was like they'd watched the show and gone, 'That's actually a really good idea'," Mr Sitch told a recent Melbourne Press Club event.

The Abbott government plans to invest savings from health measures, including the $7 Medicare fee and cuts to hospital funding into the medical research fund until it reaches a balance of $20 billion, which is expected in 2020. The capital of the fund will be protected but earnings – which are expected to reach $1 billion a year by 2022 – will be allocated to medical research.

Health department secretary Jane Halton told the hearing the details of what sort of research would be eligible for funding had not been determined.

Professor Halton said the government had expressed a willingness to consider using the money to support clinical trials, but it had not been determined whether the money would fund preventive health research, or work to convert basic science findings into useful applications.

Questioned in Parliament on Monday about the process for developing the fund, Prime Minister Tony Abbott said it was based on other endowment funds "for which there is an abundance of precedent in Australian government".

"I think the Leader of the Opposition is trying to suggest that somehow a six-week gestation period was inadequate — this from a political party that cooked up the National Broadband Network on the back of a coaster on a VIP flight. Really and truly!" he said.

These comments were echoed by Treasurer Jo Hockey on Tuesday, who called Labor claims about the medical fund being rushed "another Labor con".

"Given that there is now an inquiry into the Pink Batts program, given that Labor designed the NBN on the back of a coaster, designed "Ruddbank" on the back of a coaster, I don't think they're in any position to criticise us for having six weeks of work by public servants."

The government has said the creation of the fund hinges on its health savings getting through Parliament. But the $7 Medicare fee appears unlikely to pass the Senate, with Labor, the Greens and the Palmer United Party vehemently opposed to the measure.

Interviewed on ABC TV on Monday night, Chief Scientist Ian Chubb revealed he had not been consulted about the fund before it was announced in the budget.

‘‘I didn't have any role in it,’’ Professor Chubb said.

Professor Chubb said he did not know where the government had sought advice on the fund.

‘‘I presume that it sought it from the Department of Health, from the National Health and Medical Research Council. I presume that it talked to people within the research sector and perhaps outside the research sector with an interest in the outcomes of medical research. But I didn't talk to them.’’

Professor Chubb said he would have liked to have had input into the policy, and if he had been asked for his advice he would have counselled the government ‘‘not to make it too narrow’’.

‘‘Not to restrict it to a point where, for example, what it ends up doing is adding a few more tens of thousands of dollars to individual research grants or funds a few more research grants, that there are some big things that we need to do. We need to be able to fund clinical trials on a scale, we need to translate the results of medical research into patient care.

"We've not been terribly good at that. We're getting better at it. We start from a pretty low base and this might well be an opportunity to do things in areas and on a scale that we haven't been able to do before. And if we can do that, then it'll be good.’’

Asked why the government didn't consult Professor Chubb on the fund before it was announced, Health Minister Peter Dutton said: ‘‘It’s not a reflection on individuals, but governments have decisions to make.’’

‘‘We’ve consulted with many people. In the end I think we’ve taken what many researchers have described as a visionary decision and I think it will be in decades to come hailed as one of the great outcomes of this period,’’ he told reporters in Canberra on Tuesday.

On Monday Professor Halton also confirmed changes to hospital funding arrangements announced in the budget would result in the Commonwealth paying the states $55 billion less over the next decade than they had been promised by Labor.

But Professor Halton rejected the suggestion by Greens senator Richard di Natale that the cuts would have an impact on services, likening them to an "efficiency dividend".

“The reality is, you would expect people to be able to drive that level of efficiency,” Professor Halton said.

“These are large businesses… I actually do not accept that you cannot drive that amount of efficiency.”

Responding to the comments outside the hearing, Senator di Natale said: “Ripping out $50 billion won't make hospitals more efficient, it will just deny treatment to many people in need.”